Can coercive vertical consolidation improve the financial condition of local authorities?

Andrews, Rhys ORCID: https://orcid.org/0000-0003-1904-9819 and De Widt, Dennis ORCID: https://orcid.org/0000-0002-7299-5663 2026. Can coercive vertical consolidation improve the financial condition of local authorities? Financial Accountability & Management: in Governments, Public Services and Charities 10.1111/faam.70047

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Abstract

Vertical consolidation of small local authorities providing neighborhood services and large authorities providing strategic services into unitary authorities is assumed to improve financial condition by creating new economies of scale and scope. These improvements are anticipated to be especially great in the case of coercive consolidations initiated by higher levels of government. However, critics argue that bigger does not necessarily mean better and that the disruption caused by consolidation can weaken rather than strengthen financial health, particularly when consolidations are coercive. Using a quasi-experimental synthetic control method approach, we shed light on these contrasting arguments by analyzing the financial condition of local authorities in Northamptonshire County in England. These authorities were consolidated following a statutory Best Value Inspection in 2018, which found Northamptonshire County Council in breach of its Best Value duty and recommended structural reorganization. We compare conditions before and after the forced consolidation of the seven lower-tier authorities and one upper-tier authority within the area into two new unitary authorities. The results suggest that improvements in some indicators of financial condition were offset by deteriorations in others, including the increased exit payments incurred through consolidation. Documentary evidence highlights the promise and peril of centrally mandated structural change for the financial condition of local authorities. Theoretical and practical implications are discussed.

Item Type:	Article
Date Type:	Published Online
Status:	In Press
Schools:	Schools > Business (Including Economics)
Publisher:	Wiley
ISSN:	0267-4424
Date of First Compliant Deposit:	16 July 2026
Date of Acceptance:	19 June 2026
Last Modified:	16 Jul 2026 12:45
URI:	https://orca.cardiff.ac.uk/id/eprint/188272

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